Q&A with Ingo Weber
Ingo Weber is the Group CEO and cofounder of Digital Insurance Group , an Amsterdam-based technology partner to insurers and banks.
Describe Digital Insurance Group:
Digital Insurance Group (DIG) is a enterprise software startup focused on the insurance industry. We enable insurers, banks and brokers to offer digital propositions to their customers at record speed. Our modular and data-driven platform is used for a variety of distribution and customer engagement problems, e.g. from launching new contextual products to building a digital insurer, 360° self service customer portals, ecosystems, digital broker and bancassurance solutions.
DIG was created in 2017 through the merger of two European insurtechs (Komparu and Knip) and we have built a new tech stack based on the experience of the two companies. We are currently active in multiple countries in Europe and Latin America. The company is backed by top US and European VC investors like Finch Capital, Route66, QED as well as Zurich Insurance who co-led our Series A round (EUR 15m). We are currently preparing our Series B financing round.
What led you to your work at the company?
Overall I have more than 25 years experience in insurance/financial Service and tech. I spent the first half of my professional life working with incumbents like GE Capital / GE Insurance and Swiss Re, as well as Softbank during the dotcom boom in the late 90s. Over the last 10 yrs I have been involved as CEO/CFO/COO/Co-Founder of now 3 PE/VC backed companies, including one with a major exit. I am also part of the team that launched LeapFrog Investments in 2008, starting initially to focus on microinsurance in emerging markets.
In all these roles, I experienced first hand that the insurers have a major problem: legacy IT. That is why we are so passionate to support incumbents. I also believe we can impact the lives of millions of people by giving them peace of mind and a safety net in a truly digital way.
If not for insurance, what would you do?
My other passion is investing for impact, e.g. VC/PE investments that can help make the world a better place as well as raising awareness that there is not necessarily a trade-off between financial return and social impact. I am also intrigued by the idea of bringing together all stakeholders and various investors (Institutional investors, Governments, donors, NGOs etc) to work on the worlds biggest problems like Healthcare, Water, Education, Energy and Financial Inclusion.
The Digital Insurance Group has built different solutions and you are working with insurers, banks and brokers – what is the main problem you are solving for?
DIG enables insurers to innovate at record speed, focusing on Distribution and Customer Engagement solutions. We are addressing the two biggest problems of incumbents: 1. Lack of New Sales and how to reach new client segments and 2. Retention, increasing share of wallet and offering new services to existing users.
The biggest hurdle for incumbents is their complex IT architecture, which means building new propositions takes up a lot of time and resources.
With our modular API-based platform and front-end suite, DIG enables insurers and bancassurance players to build new digital propositions on top of legacy systems – or greenfield – at record speed.
The DIG solution integrates seamlessly into the existing IT infrastructure and connects to multiple external databases to build new, data-driven solutions that offer a fully customized, mobile-first insurance experience to customers.
You’ve mentioned your work with Zurich, Allianz and Aon; specifically what have you built for each and what is the focus area/line of business/which countries?
Our platform and solutions are product agnostic and thus used in life, P&C and health.
Some of the projects that we can talk about for instance include the digital broker that Santander has announced last week in Latin America (Klare). DIG has been delivering the complete technology platform and implemented the solution. We created a 100% digital broker to quickly respond to the needs of the emerging digital generations. The service gives a seamless client journey with personalized pricing, comparison and flexible product offerings from multiple insurers including issuing the policy and sales campaign management. The powerful self-service client portal encourages strong engagement with customers and generates many cross-sell opportunities.
Zurich has been using our platform for a variety of use cases, for instance:
- Customer engagement App; in order to increase cross-sell and loyalty, a top 5 direct player used the DIG platform to offer a visually-rich native mobile app. Integrated with the legacy systems through the DIG API middle layer, the services includes renewal, buying new products, advisory, FNOL as well as a risk meter based on geolocation and smart push notifications to increase interaction and prevention
- Cross-sell tool; a major insurance company needed to generate more cross-sell opportunities that were not possible with their established service level. DIG’s insurance solution enabled them to quickly create targeted and personalized offers that could be accepted with just one click, with agents stepping in proactively when necessary to advise and close deals. Clients are also offered a self service portal post sale. DIG combined data from legacy systems with analytical tools and a rules- based data pipeline to improve conversion rates.
For AON, we launched an Employee Benefit platform to offer health insurance advisory, personalized pricing, comparison and direct purchase opportunity. The portal is used by employees of AON`s corporate customers.
Other use case we have delivered or are working on include:
- Digital life insurance – Latin America
- Connected car insurance – Europe; a global insurer is working on “building the insurer of the future”. DIG developed an auto insurance sales solution using third-party services in order to minimize friction and limit input to just three simple questions. Using social media and other integrations through APIs and dynamic, personalized pricing that monitors competitor pricing in real time and using driving behavior to further personalize covers and prices.
- Wellbeing ecosystem in Life; launching a new life insurance product with an easy and personalised customer journey, and through API’s adding wellbeing services to boost customer engagement and collect data on behaviour.
Knip isn’t a success story. In your words, what has worked, what hasn’t, and what are your takeaways?
Knip started with a great idea, which was to give people a convenient way to get an overview of all their existing insurance policies from multiple providers. However, there were many issues with the business model and the execution, all of which would be worth a separate discussion. Fundamentally, every user had to sign a broker mandate as part of the onboarding process. Most consumers did not understand what a broker mandate was and what the implications were. Most importantly, it means that Knip was the new broker of record, and the consumers previous broker or agent would not receive any longer the recurring commissions from policies sold in the past. The previous broker of course was not amused, asking his customer, who was often living in the same village, if he was unhappy with his service. As a consequence, many mandates got cancelled. In essence, there were over 700,000 downloads of the app, but relatively modest conversion of customers and retention. Another important factor was the CAC versus CLV topic. VC money was used for TV ads to generate traffic and app downloads. A very expensive and unsustainable channel for a startup, in particular if you don’t even have Product-Market-Fit and not gotten your onboarding right. CLV in theory is high, but execution is key: insurance has to be sold (note: look at Assurance IQ). Other factors: No APIs to insurers to get the data, which led to manual and unscalable processes. A lack of willingness from insurers to cooperate with Knip, many of them just did not process their request to replace the broker and pay commissions. Not really a surprise. If you want to receive commissions from insurers, make sure they are your friend. I could go on…. But fundamentally as a consumer, everyone loves the idea of having one app that manages all your insurance policies and can give you 24/7 advice.
Any future plans for Knip?
As Digital Insurance Group, we are focussed on delivering software and solutions to incumbents. In the early days, it was good to demonstrate a concrete use case with Knip. However, we have not focused too much on our Knip business. We massively streamlined the operations and developed a pipeline of B2B2C opportunities. In particular digital bancassurance is a hot topic in Europe. There are a few trends like open banking and marketplace banking that are driving the big appetite for digital broker solutions. We see the traditional exclusive Bank-Insurer relationships disappearing, banks increasingly want to work with multiple insurance partners. As DIG we provide the technology for banks and other distribution partners to sell insurance. With Knip we can also offer a full broker and advisory service on behalf of the bank, which is a lucrative business.
The ultimate frictionless insurance service is embedded insurance; meaning travel insurance offered as part of a mobile bank subscription fee, or auto insurance offered as part of a vehicle subscription plan. You clearly work with several traditional insurers – how aware are they that consumer-facing brands are more of a threat than the average D2C insurtech?
This is interesting: Many incumbents talk about big tech being a bigger threat than the D2C startups. But when it comes to concrete actions, many incumbents are stuck in their old product centric culture, developing products and pushing them down a channel. I am missing a big focus on being truly digital, solving customers problems in a contextual, real-time and interactive way including designing end-to-end customer journeys. Most players are lacking a data driven culture and are stuck in legacy (IT, people, processes). Some big players are undertaking big efforts in striking interesting partnerships (e.g. Axa), cooperating with InsurTechs to drive innovation (e.g. Zurich) or are working hard on reducing complexity and developing a direct business (e.g. Allianz). But all players are struggling in scaling up their initiatives. That’s why some of them come to us.
You’re passionate about microinsurance, can you share your work and recent activities in the space?
About 10 years ago, in my role as Head M&A and leading strategic investments globally at Swiss Re, I spent a fair of amount in the emerging markets to search for growth opportunities. Particular the health insurance space was quite interesting, given the low level of penetration. It was on one of those trips when I walked through the streets of Mumbai that changed my life. I met Rajiv, a disabled men, begging for money. He was a rikshaw driver that fell back into poverty because he could not pay for his medical bills after his accident. I left Swiss Re, joined some friends and we started to raise a dedicated impact investment fund for microinsurance and emerging consumers, which was hailed by Bill Clinton. Our investment approach is “profit-with-purpose”, i.e. looking for sustainable and profitable investment opportunities that also have a positive social impact. Today LeapFrog Investments is managing over $1.5bn, many of the leading insurers and asset managers are LPs in our funds. The latest fund closed this year with an amount of $740m. In 2017, Fortune ranked LeapFrog Investments as one of the top 5 Companies to Change the World, alongside Apple and Novartis.
The initial microinsurance theme has broadened over time to include broader financial services and recently as well healthcare. As of now, there are 26 portfolio companies that reach 188 million people, across 35 countries. 155 million of those individuals are emerging consumers in Africa and Asia, living on less than $10 per day per person in the household. At the same time, LeapFrog’s Profit with Purpose investment strategy has seen its companies grow on average by 35 per cent per year since investment, enabling a host of profitable exits to strategic buyers.
The approach is partnering with leading regional insurers. One example is Thailand’s Syn Mun Kong Insurance Public Company Ltd (SMK), the country’s second-largest motor insurer and fifth largest general insurer. SMK is one of the most distinguished and trusted names in Thailand’s insurance industry that is making big efforts in reaching the rural population.
The funds also makes investments in fast-growth digital financial services businesses, including category-leaders like BIMA. As an early investor, over four years LeapFrog helped BIMA to sell over 30 million insurance policies to emerging consumers and to build an innovative teledoctor service. At the end of 2017, we have sold a major stake in BIMA as part of a $96.6m investment by Allianz X, the digital investment unit of Allianz Group.
As a member of the investment committee of the various funds, it is exciting to see the level of innovation in the emerging markets and how much we can benefit from that in the developed world.
The glass is half-full. (There are just too many pessimists on this world). Life is great.
I have been writing a book on InsurTech and platform economy. Why I have been writing this ? We as “insurtech geeks” are living in almost bubble. But there are thousands of insurance companies that are not doing enough in terms of transforming their business. We all know that a massive and historically unique transformation is happening (“End of traditional insurance”) but there is no Uber moment, given the large cash flows from their existing book of business and the inertia of customers to switch. Hence it will be a slow death, I like drawing the analogy to the fable of the “boiling frog”. At some point it will be too late for insurers to act.